New mall space to increase by 40 % this year-end, reveals JLL study

Anil Urs

Retail space supply in the next three years is expected to touch 19.4 million square feet (msf) and demand to be firm at about 15 msf   -  The Hindu

19 million sq ft of new mall space by 2020

Bengaluru, February 15

Despite the onslaught of new retail formats like e-commerce, tele- marketing and others, we will continue to see a steady growth in brick and mortar form of retail as a sector, Ramesh Nair, CEO and Country Head, JLL India.

“The sector is pegged to grow to ₹1 trillion by 2020, at a CAGR of approximately 15 per cent. Foreign Direct investment (FDI) will be instrumental in achieving and surpassing these growth estimates,” he added.

Growth in consumption

The retail sector of India is going through a fresh period of growth backed by strong economic fundamentals and with increased interest from investors. According to Nair, the sector saw investments of over $750 million in 2017. Encouraged by the urbanisation, millennials and rising proportion of nuclear families in urban locations.

“The Retail sector is set for over 70 per cent of consumption growth in the next 15 years, is expected from the population aged 15-59 years, with increased per capita consumption. This along with the opening up of the FDI route for retail brands entering into India, will further boost retail investments,” Nair explained.

New mall space

The country is expected to see over 19 million square feet (msf) of new mall space addition by 2020. Delhi-NCR, Hyderabad and Chennai is likely to see highest supply in 2018. While new mall supply in Mumbai set to decline by 13 per cent year-on-year in 2018.

Nair said as per the recent JLL study, retail space supply in the next three years (2018-2020) is expected to touch 19.4 million square feet (msf) and demand to be firm at about 15 msf.

40% increase

The total newly completed malls in 2017 recorded at 5.6 msf which is expected to see an increment of close to 40 per cent year-on-year and rise to 7.8 msf by the end of 2018.

“The largest contribution to this will be coming from the two southern cities of Hyderabad (2.2 msf) and Chennai (1.5 msf) which will see significant influx of mall supply. Delhi-NCR will be witnessing the highest supply of 2.3 msf of new mall space in 2018, albeit recording a decline of 28 per cent since 2017,” Nair said.

Published on February 15, 2018
TOPICS
retail
real estate

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